Thames Water has sounded the alarm over a potential 44 percent hike in customer bills under its new business strategy. The beleaguered utility giant has laid out ambitious plans to ramp up spending and investment in its infrastructure, but it comes with a stark warning that this could lead to a significant surge in charges for consumers.

The company, which is currently grappling with a severe funding shortfall, has outlined a proposal to boost expenditure by £1.1billion and hinted at an additional £1.9billion splurge on network improvements.

These proposals are part of Thames Water’s latest pitch to industry regulator Ofwat for the period leading up to 2030.

As Britain’s largest water provider, serving a staggering 16 million customers across London and the Thames Valley, Thames Water has revealed that its five-year blueprint would see overall spending soar to £19.8billion. The increased funds would primarily be channelled into environmental initiatives.

However, the firm has cautioned that if it proceeds with the extra £1.9billion network investment, average water bills could climb by another £19 over the next half-decade. This would be in addition to an already anticipated 40 percent price increase.

Should Ofwat greenlight the entire plan, customers could be facing annual bills of £627 by the end of the decade, totalling a potential increase of around £62 a month. 

Chris Weston, Thames Water’s CEO, commented: “Our business plan focuses on our customers’ priorities.”

He added, “As part of the usual ongoing discussions relating to (the business plan), we’ve now updated it to deliver more projects that will benefit the environment.”

He assured that dialogue with regulators and stakeholders would persist.

In the face of a daunting £15billion debt, Thames Water is being forced to overhaul its business strategy to avoid financial ruin.

Its investors have declined to inject the necessary funds to fill a funding gap, and reports indicate that the Government is devising plans to effectively nationalise the water giant.

Thames Water is said to be in ongoing discussions with its existing shareholders – which include the Universities Superannuation Scheme (USS), China’s sovereign wealth fund, a Canadian pension fund and the BT Pension Scheme.

Ofwat will then give its initial decision on the proposed business plan, known as PR24, on June 12.

Thames Water’s proposed 40 percent increase stands in stark contrast to the average 31 percent increase proposed by other water companies in Britain over the same five-year period.

Commenting on the recent developments, Sarah Olney, Liberal Democrat Member of Parliament for Richmond Park said she will be tabling a Bill in Parliament today, that would “immediately” put Thames Water into administration. 

She wrote on social media platform X: “This plan is a farce and the government must now intervene to hold this polluting giant to account.”

Meanwhile, Mike Keil, chief executive of the Consumer Council for Water (CCW), said: “On the surface, the proposal for more investment from Thames Water is a positive step for its customers that have endured some of the worst customer service in the sector.”

However, he noted: “We should not lose sight of the fact that only 16 percent of its customers thought the company’s proposed bill rises in its five-year plan were affordable.

“This announcement appears to offer nothing to ease the fears of those already struggling to pay.”